Tag Archives: Gideon

Gideon’s Last Stand?

Regrettably, I will not have the pleasure of hearing the hubris-fired reading of the Budget Speech by Chancellor Gideon…..and I do SO enjoy hearing fiction read out-loud!

Today’s press is full of advice for him but unfortunately, he will not be able to stray far from the path he has already chosen for us.

The components of today’s Budget will be cosmetic low-cost “initiatives” , largely fueled by Public Service casualties. Gideon WILL brazen it out by feeding the nation carefully chosen and spun statistics but since he painted himself into Austerity Corner, he cannot move. He will try to give the impression that he is able to somehow warm the economy……. but this one-trick pony Chancellor will do it to the accompaniment of: “Throw another Public Servant on the fire!”

Yes, there may be talk of  “saving through efficiencies” but we know that efficiencies are a myth.

“Need a quick £2.5 billion? Sack a load of Public Servants and slash services.” The arithmetic is very simple!

By the way, don’t just blame Gideon. The Cabinet of “yes men” is fully supportive of his fiscal fumbling. They’re right behind him!

Incidentally, the OBR is  publishing  its latest growth and borrowing forecasts today. More ripping yarns!

The government’s  target for the elimination of the structural deficit, in keeping with tradition, continues to slip further and further into the future – where it will remain for many years to come. At the moment, the projected target is 2017/18.

We can already predict that the next estimate may be headed towards 2018/19……and so on.

p.s. I wonder if he’ll mention the banks?

Mark Carney, the Governor-elect of the Bank of England is the perfect hire for this Government.

Over the last two years, it has become increasingly evident that Chancellor George Osborne and Business Secretary Vince Cable have no policy at all in respect of banking.

The Conservatives have known all along what they want and need from our banking system, whereas Vince Cable has been reduced to delivering the odd grumpy sound-bite.

It’s been nothing more than window dressing.

Because of the symbiotic relationship between politicians, retired politicians and banks, they had to hire someone who would  more-or-less preserve the status quo but who was also a major international player.

Mr Carney, a Goldman Sachs-trained Investment Banker is the exceptional candidate for the role……..as long as he delivers what Chancellor Gideon expects and doesn’t overdo the Bank of England’s “independence” bit.

We can forget Banking Reform (remember “firewalls”, “good banks”, “bad banks”, “Splitting the banks”, “Too big to fail banks” and all the other buzz phrases from the last four years?)

Forget them all.

Mark Carney is the current Governor of the Bank of Canada and as such, responsible for the Canadian Banking system which is considered to be the safest in the world. However, the Canadian Banking system is dominated by five main banks and most importantly, these banks are not just retail banks but they are Holding Companies which also control  activities such as  credit cards, brokerage, mutual funds, insurance etc.

That is probably the model which appeals to our Chancellor and the government –  and, most importantly, which will require the minimum amount of “tweaking” of the British banking system.

The Coalition government had absolutely NO INTENTION of ever reorganising our banking system and is now able to say: “Let’s wait until the new Governor is in place.”

Meanwhile, because ALL regulation will eventually land in the Bank of England’s lap, we should expect the FSA to atrophy and die – as it has been doing since inception and anyway, Lord Turner stands absolutely no chance against this guy – with the added “frisson” of Turner having also applied for the BoE Governor  job.

Here’s the Chancellor’s slightly overdone sales pitch:

“Mr Carney is unique amongst the potential candidates, in combining long experience of Central Banking, huge international credibility in economics, deep expertise in financial regulation and a first-hand experience of private-sector financial institutions.”

He wasn’t the exceptional candidate. He was the only candidate.

Gideon’s latest Wheeze!

Various half-arsed stimulus packages by clueless governments without properly jump-starting their economies achieve nothing but a postponement of the day of reckoning.

Banks will fail, more housing  markets will collapse and panicked governments will attempt to raise taxes from the survivors as they borrow even more in a vain effort to create yet more economic stimuli.

Today, in the UK, after Project Merlin (“a great success!”), the National Loan Guarantee Scheme (“a great success!”), we have the launch of the Funding for Lending scheme.

This latest scheme, is potentially worth £80 billion but to the trained eye, looks suspiciously like rebranded Quantitative Easing.

This scheme , like most “schemes” promises no economic outputs or goals and the wording is very interesting (and flabby):

Funding for Lending aims to encourage banks to lend to both businesses and households”.

It “aims to encourage”.

Give it a rest, Gideon.